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Amazon Vendor Manual gives Amazon permission to use vendor trademarks for keyword advertising of competitor products, says federal court

RTDC — Read the damned contract: That’s a big cautionary lesson for vendors selling their products on Amazon or other hosts. Here’s a case in point that I just read about (hat tip: Susan Rector). ¶ Video Professor, Inc. (VPI) sold its products on Amazon. The relevant agreement was the Amazon Vendor Manual. That manual said that Amazon had a “worldwide, perpetual, and royalty-free license” to use the relevant VPI trademarks. ¶ As a result, a federal court held, Amazon had the right to use VPI’s trademarks in doing Google keyword advertising for products of VPI’s competitors — even after VPI stopped selling its products on Amazon and terminated the agreement. See Video Professor, Inc. v. Amazon.com, Inc., No. 09-cv-00636, 2010 WL 1644630 (D.Colo. April 21, 2010) (granting Amazon’s motion for summary judgment dismissing VPI’s trademark-infringement claim).

Amazon also filed a motion to force VPI to reimburse Amazon for its attorneys’ fees. VPI for its part filed filed a notice of appeal. The parties subsequently settled the case, and both the appeal and the motion for attorneys’ fees were dismissed.

And the agreement might not have mattered anyway: If the current judicial trend holds, Amazon might well have had the right to use VPI’s trademarks for keyword advertising in any case. See this blog entry by Eric Osterberg.

{ 2 comments… add one }
  • Chris Lemens 2011-01-17, 10:55

    I wonder what happens if you combine this case with the cases saying that a trademark license lacking a right for the licensor to police the use of the trademark causes the trademark to terminate.

    Chris Lemens

  • D. C. Toedt 2011-01-17, 11:22

    @Chris, the trend seems to be that a trademark owner’s competitors can use the mark in keyword advertising (see the last paragraph of the post). That seems to imply that the Amazon license terms are not a naked license that would destroy VPI’s rights in its trademarks.

    Thanks for stopping by.

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